LIHEAP Serves More Amid Increased Shutoffs,
Record Cold and Continuing Recession
LIHEAP is expected to serve about 9.5 million U.S. households in FY 2010, according to the most recent survey results released by the National Energy Assistance Directors’ Association (NEADA).
That’s an increase of nearly 25 percent from the record 7.7 million receiving LIHEAP in FY 2009, which in turn was a 35 percent increase from the record of 5.7 million set in 2008.
As of mid-February, applications were up by more than 25 percent in 10 states: Mississippi (68 percent ), Washington (42 percent ), Michigan (38 percent ), Nevada (34 percent ), New Jersey (31 percent ), West Virginia (28 percent ), Colorado (26 percent ); and Kansas, New Hampshire and Wisconsin each had 25 percent.
The state of Idaho reported a 20 percent increase in households, and it announced on March 6 that it was closing its LIHEAP three weeks early due to depletion of funds. Last year it served around 35,000 households; the number this year is at least 45,000.
States, particularly those in the northern U.S., expect continued surges in applicants this spring due to the expiration of winter shutoff moratoria that will leave many households without home energy going into the summer and next winter.
In at least five states, (Indiana, New Jersey, New Mexico, Utah and Georgia) shutoff moratoria expired as of March 15, and in at least 17 more the expiration date is March 31 or April 1. These include the larger states of Michigan, Washington, Illinois and Pennsylvania. In another 10 states moratoria expire on April 15 or April 30.
During FY 2009, about 4.3 million households lost power due to inability to pay their bills, up from 4.1 million in 2008, according to a NEADA report in December 2009. Additionally, the majority of states close LIHEAP for heating assistance applications at the end of March, April or May. While about half of them provide some assistance for summer electric bills, these programs are dependent upon funding levels. About half the states attempt to operate crisis assistance components year round, but may end up closing those as funding is depleted.
The continuing recession and high unemployment and foreclosure rates have exacerbated the unaffordability of home energy, along with the bitterly cold temperatures experienced by much of the country during January and February. In South Carolina, North Carolina, Alabama, Florida and West Virginia monthly utility bills after the January freeze were reportedly up an average of 50 percent and requests for payment assistance soared.
In Maryland, the largest utility, Baltimore Gas and Electric, has warned customers to expect higher bills in March because of the February blizzards. The company provided a one-time $100 credit for all customers on February’s last month's bill to reduce the impact of rising energy costs.
To help offset the rapid rise in applications, NEADA members have called on the Administration to release the remaining $100 million of LIHEAP emergency funds and on Congress to provide supplemental funding for FY 2010 of up to $2.5 billion. To date $4.5 billion in regular LIHEAP funding has been released to the states along with $490 million in emergency funding.
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CO2 Auctions Continue to Fund Low-Income Energy Programs
Since 2008, ten Northeast and Mid-Atlantic states have participated in the Regional Greenhouse Gas Initiative (RGGI), a coalition working to limit carbon dioxide pollution through a cap and trade system.
States sell emission allowances through auctions and invest proceeds in consumer benefits: energy efficiency, renewable energy, and other clean energy technologies. All of the states passed legislation setting guidelines for allocating the funds; legislation in eight states requires them to use a percentage of RGGI funds to support low-income energy programs.
Six auctions have been conducted to date, raising over $464 million, of which $186 million or 64.5 percent has been allocated to energy efficiency programs, the remainder to renewable energy and climate change projects. States’ contributions to low-income rate assistance or energy efficiency are listed below.
State law designates 69.5 percent of the auction proceeds to the Energy Conservation Management Board, which advises utilities on energy conservation. Over $18 million so far has supplemented the Connecticut Energy Efficiency Fund (CEEF) that is used to fund energy efficiency programs for all energy users. Since 1998, the CEEF has been funded by a charge on all electricity sold by the state's two IOUs and by customers of three gas companies; about 21 percent of all its funding, including RGGI, must be spent on low-income efficiency.
Maryland has allocated a portion of auction proceeds to low- income energy assistance. Initially, the amount was 17 percent of the proceeds, which amounted to $3.6 million in 2009 to supplement the state’s Electric Universal Service Program, which provides electric bill payment assistance. The 2009 legislature changed the allocation to up to 50 percent of auction proceeds collected between March 1, 2009 and June 30, 2011. The Maryland LIHEAP office's 2010 budget projected $53.6 million in RGGI funding for low-income bill assistance. As of February, no funding had been received.
Four million in proceeds from two 2008 auctions were allocated for heating system replacements for low-income households through the state weatherization agency. Revenue from all four 2009 auctions, yielding more than $50 million, is expected to be dedicated to existing electric utility-administered energy efficiency programs, including low-income, as directed by the Green Communities Act.
State legislation mandates that ten percent of auction proceeds contribute to low-income energy efficiency. Initially, $1.2 million was allocated to expand low-income weatherization; another $1.1 million expanded electric utility CORE Energy Efficiency programs, which have a low-income component.
The state established a Global Warming Solutions Fund for auction proceeds, of which 20 percent is allocated to the Board of Public Utilities to use either to reduce electricity demand or to reduce costs to low-income and moderate-income electric customers. In 2009 the Board allocated $6.6 million in auction proceeds to the fuel fund New Jersey Shares, which used it to help pay energy bills for income- eligible households facing a financial crisis.
About $45 million over 3 years will supplement current low-income energy efficiency programs funded by a system benefits charge (SBC) and operated by the New York State Energy Research and Development Authority (NYSERDA). The RGGI funds will include $19.2 million to reduce oil and propane energy use in multifamily buildings; $13.4 million to supplement SBC and Energy Efficiency Portfolio Standard Fast Track Funding for oil and propane space and water heating efficiency measures for low-income households and about $12 million for energy efficiency services for low-income homes. NYSERDA negotiating with a third party to leverage RGGI funds with federal funds in order to double the number of low-income households that receive services through this component.
For more information on auction results and how states have allocated the RGGI funds, see www.rggi.org or www.env-ne.org/public/resources/pdf/ENE_Auction_Tracker_20100104.pdf
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